T­his is the way the mo­ney rolls

Mossel Bay Advertiser - - News - De­ni­se Lloyd

“Banks may be­co­me to­tal­ly out­da­ted and the po­wer of ma­na­ging their own mo­ney could very well be pla­ced back in­to the hands of in­di­vi­du­als,” says Da­wie Roodt, the well-kno­wn e­co­no­mist from Ef­fi­cient We­alth.

He was the guest spea­ker at the an­nu­al Mos­sel Bay Bu­si­ness C­ham­ber ga­la e­ve­ning on F­ri­day, 25 Au­gust.

Roodt ga­ve a run­do­wn of the two forms of tra­di­ti­o­nal mo­ney and how the new ge­ne­ra­ti­on of di­gi­tal and vir­tu­al mo­ney could chan­ge the w­ho­le lands­ca­pe of doing bu­si­ness.

T­he­re is the go­vern­ment mo­ney dis­tri­bu­ted by a cen­tral aut­ho­ri­ty

(such as the Re­ser­ve Bank that dis­tri­bu­tes the rand) and pri­va­te mo­ney, cre­a­ted by pri­va­te in­di­vi­du­als or groups.

Pri­va­te mo­ney is old news. A gift vou­cher, for in­stan­ce, can be of­fe­red at va­ri­ous shops and e­ven cel­lp­ho­ne air­ti­me can so­meti­mes be u­sed as mo­ney. The tic­kets that you buy to pay for your pan­ca­kes at a ba­saar are no­thing ot­her than pri­va­te mo­ney.

He then fo­cu­sed on di­gi­tal and vir­tu­al mo­ney and how the banks could be to­tal­ly si­de­step­ped in the de­a­lings bet­ween two in­di­vi­du­als.

“Most of us are al­re­a­dy de­a­ling in en­cryp­ted mes­sa­ges w­hen we ma­ke use of the po­pu­lar so­ci­al me­dia plat­form of W­hat­sApp. The mes­sa­ge is pro­tected bet­ween the two par­ties and t­his is ex­act­ly w­hat you do w­hen you ma­ke use of mo­ney that is not stas­hed a­way so­mew­he­re in a bank,” Roodt said.

Di­gi­tal mo­ney does not re­al­ly ex­ist. It is al­so cal­led e­lec­tro­nic mo­ney as it ex­is­ts so­mew­he­re on a num­ber of com­pu­ters. We use di­gi­tal mo­ney w­hen we pay with our cre­dit cards or w­hen we ma­ke an in­ter­net trans­fer bet­ween ac­counts. Ot­her than with phy­si­cal mo­ney, two pe­op­le do not need to be in e­ach ot­her’s pre­sen­ce to ex­chan­ge di­gi­tal mo­ney. T­hey can be in va­ri­ous pla­ces in the wor­ld.

A­not­her cha­rac­te­ris­tic of di­gi­tal go­vern­ment mo­ney is that in­di­vi­du­als can­not trans­fer mo­ney di­rect­ly to one ot­her. With di­gi­tal go­vern­ment mo­ney, ho­we­ver, it is al­ways pos­si­ble to fol­low the “trail” of mo­ney on bank sta­te­ments.

Pri­va­te di­gi­tal mo­ney

Pri­va­te di­gi­tal mo­ney is al­so pos­si­ble. Any group can de­ci­de it wants to ma­ke its own mo­ney. Di­gi­tal mo­ney can be cre­a­ted and the al­go­rithms (for­mu­las in the pro­gram­ming) can be writ­ten in such a way as to on­ly al­low a cer­tain a­mount of mo­ney to be ma­de. Furt­her­mo­re, the com­pu­ters of e­ver­y­bo­dy par­ti­ci­pa­ting in t­his sche­me mo­ni­tor and po­li­ce one a­not­her.

Pri­va­te mo­ney is de­cen­tra­li­sed mo­ney and it can al­so be trans­fer­red from one per­son to a­not­her, wit­hout a fi­nan­ci­al in­ter­me­di­a­ry. The re­sult of t­his is that fi­nan­ci­al tran­sacti­ons can e­a­si­ly be hid­den, which has im­men­se im­pli­ca­ti­ons for tax col­lecti­on, for ex­am­ple!

The last ty­pe of mo­ney is vir­tu­al mo­ney. It is so­mething that is li­ke mo­ney but is in fact pre­tend mo­ney. The ga­me Mo­no­po­ly’s mo­ney is an ex­am­ple of vir­tu­al mo­ney.

To ma­ke mat­ters wor­se for po­li­ti­cs, all of t­his can be en­cryp­ted. “Wit­hout get­ting too techni­cal, t­his sim­ply me­ans that the techno­lo­gy e­na­bles the­se pri­va­te fi­nan­ci­al tran­sacti­ons to be “hid­den” very success­ful­ly, just as your W­hat­sApp mes­sa­ges are al­re­a­dy en­cryp­ted.” he ad­ded.

Photo: Ter­sia Marais

Da­wie Roodt

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